January 18, 2013

Union Station projects have seen cost increases, says Ontario’s auditor general

TORONTO

In the Auditor General of Ontario’s 2012 report a review of Metrolinx’s Regional Transportation Plan (RTP) found that major projects in the Union Station revitalization have experienced significant cost increases.

The revitalization is one of the priorities in the RTP’s first 15 years. Two of the more significant projects are restoring the train shed and replacing switches in the Union Station Rail Corridor (USRC).

The Auditor General says the cost of restoring the train shed could now reach $270 million, 25 per cent more than Metrolinx’s initial estimate.

The cost of replacing the switches in the USRC could be more than twice the amount of the original purchase order of approximately $38 million.

The switches currently in use at Union Station date back to the 1920s. The renewal program includes upgrading tracks and switches to increase their reliability and allow for faster train speeds. Metrolinx said “replacing this type of switch while continuing to operate GO trains was a difficult process.”

The Auditor General recommends that to ensure RTP projects are delivered cost-effectively and on time, Metrolinx should ensure that contracts have firm ceiling process, whenever possible, and contracts should then be monitored for adherence to the original ceiling price.

It also recommends that for work on the USRC, Metrolinx should also consider funding other qualified suppliers or obtaining in-house expertise.

In its response, Metrolinx said there have been unique challenges with the project.

“For example, when renovating an 82-year-old, 8.6-acre train shed roof, it is difficult to anticipate all structural issues. Co-ordination with the federal government and with the City of Toronto, who are developing new concourses below the train shed, was also challenging,” responded Metrolinx.

At the time of procuring the contract for the train shed restoration, GO Transit determined the best way to address the significant risks associated with the project was to use a modified stipulated-price contract, said Metrolinx.

GO Transit subsequently engaged an independent fairness officer to review the process and consider the change orders involved, which confirmed the process was fair.

With the USRC, Metrolinx says it continues to take additional steps to reduce its future reliance on suppliers, including obtaining in-house expertise to carry out similar work in the future.

“Metrolinx will apply a different model upon the completion of the Union Station revitalization, which is expected in 2016.”

Union Station is the nation’s busiest rail transportation facility, serving more than 250,000 passengers daily using the services of the Toronto Transit Commission, GO Transit, Via Rail and Amtrak.

The Auditor General recommended ensuring that all projects contemplated under the RTP are subject to a rigorous cost-benefit analysis that considers financial, economic, environmental and social needs.

Metrolinx responded that it has completed a cost/benefit analysis on all the projects included in the first stage of the RTP and this approach will be applied when considering future projects.

The report says without long-term sustainable funding, the current RTP cannot be implemented. The Auditor General says the RTP’s $50 billion cost estimate may prove to be low.

Apart from the timelines covering the first 15 years and years 16-25, Metrolinx has no other defined targets for the overall achievement of the RTP, says the report.

The Auditor General said to ensure that provincial, regional and municipal stakeholders are kept up to date on the funding requirements and progress of the RTP.

Metrolinx should: regularly consult with GTHA municipalities and other key stakeholders as the funding strategies are being formulated, especially on options that affect local residents; and have clearly defined targets for the RTP’s more significant projects and regularly report on costs and progress toward completion.

Metrolinx said it has increased its engagement with municipal officials as well as transit managers.

“We have also sought input from municipalities’ chief planning officials through regular meetings as we move forward with our work on the investment strategy,” it said.

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DCN NEWS SERVICES

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